Europe PE producers target March hikes

28 February 2007 11:18  [Source: ICIS news]

LONDON (ICIS news)--European polyethylene (PE) producers are targeting price increases in March after settling February higher than January, sources said on Wednesday.

 

“We are announcing a €50/tonne ($66/tonne) increase on a take it or leave it basis,” said one major PE producer citing limited availability and strong demand as justification for such a move.

 

Last week, Dow announced a €60/tonne hike to all its European PE buyers and Basell made it clear that it would also be seeking a €50/tonne increase in March.

 

Buyers were still negotiating February deals in some cases but most retroactive business was settling at plus €20-30/tonne leaving low density polyethylene (LDPE) prices around €1,170-1,190/tonne FD (free delivered) NWE (northwest Europe) on a gross basis.

 

PE availability has tightened in the past few weeks on the back of strong demand and earlier cutbacks due to the lack of affordable ethylene.

 

Shortfalls in contractual volumes of monomer, caused by unplanned outages, were not made up by spot purchases by producers as spot prices have remained consistently higher than the contract.

 

PE producers feared a hike in Q2 ethylene and several said that they were not prepared to lose any more margin after a big loss in Q4 2006 when ethylene rolled over and some grades of PE lost as much as €150/tonne.

 

($1 = €0.76)

By: Linda Naylor
+44 20 8652 3214

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